Q&A: Harry Herington, CEO and Chairman of the Board, NIC Inc.

CEO shares insights about NIC’s future as the company celebrates 20 years in the state portal business.

Kansas-based NIC has been led by Harry Herington since 2008, when he took the helm as its CEO and chairman of the board. Prior to that, he held various other leadership positions within the company. Herington holds a bachelor’s degree from Wichita State University, and a law degree from the University of Kansas School of Law. NIC and its subsidiaries build e-government services and manage websites for more than half of state governments. In this short email conversation, Government Technology talked to Herington about the future of NIC and what’s ahead for e-government in general.

Where does NIC fit into the ecosystem of larger companies vying for government business in the cloud (such as Google)?

NIC is focused on enterprisewide solutions, and centralized hosting is just one of the services we provide our government partners. We have been operating a private cloud since before the term “cloud computing” was coined. Centralized hosting is a value-add option we can provide our government partners, but it is not currently a stand-alone service we sell.

Do you think security concerns regarding e-government transactions among state and local government customers is subsiding? Are your clients becoming more educated on the issue?

Security is always an issue that is top of mind at NIC and for our government partners, and a reason that we provided a private, secure cloud environment for sensitive government and public information. Another value of the services NIC provides is that when we develop sites and applications for our government partners, we take on the responsibility of deploying secure applications and can alleviate some of that burden.

How has NIC’s self-funded model evolved over the years?

The self-funded business model was driven by the business community that needed online access to government services. With the lack of government funding available, the business community embraced a sharing of efficiencies that is the basis of our self-funded model.

It is not uncommon for states to lead the way in embracing new technology. In 1992, we began with one contract in the state of Kansas and our company has focused on state and local government for the past 20 years. Our first federal self-funded contract [with the U.S. Department of Transportation] launched in 2010. We believe federal agencies can experience the same value from our solutions and self-funded model as state agencies have.

Regardless if it’s federal, state, or local — all levels of government want to provide quick, convenient and transparent information and interactions with the businesses and citizens they serve. We believe NIC has the best solution, and can partner with government to achieve that goal in a manner that doesn’t require the use of appropriated taxpayer dollars.

Where do you see NIC growing in the future? States are a finite market … so how does the company grow?

We are excited about the future of NIC. While the number of states may be finite, the number of services within those states is not. Every year the legislature makes changes to statutes that create new services or enhance old ways of interacting with government. In addition, there are several opportunities to provide even more solutions to local government. This combined with technology improvements create opportunities for NIC to assist our partners. Technology continues to evolve at a rapid pace and government is requiring more and more information be made accessible to citizens. This means NIC will be able to grow by developing new services that are delivered using the latest technology. We believe these solutions will be valuable at all levels of government. In fact, the future of NIC may even include international business.

How would you describe efficiency fees relative to your self-funded model?

NIC is focused on providing efficiencies and value to those that interact with government – businesses and citizens. Over the course of our 20-year history, only about 20 to 30 percent of the thousands of services we have developed include a small efficiency fee. In fact, many of the services we have developed have no charge to the businesses and citizens to use. We have developed services such as Business OneStops for starting a business, charity lookups, and unclaimed property searches – all of which have no charge. Sometimes there is a savings that can be realized and we charge a small efficiency fee for that transaction. It’s like when you mail a package, sometimes you’re more than willing to pay a slightly higher rate to send something first class or priority mail and get your package delivered quickly. Similarly, a small number of online services that NIC develops provide a similar efficiency and helps those interactions proceed more quickly and conveniently. Additionally, in many cases manual or paper processes continue in addition to the online process – providing businesses and citizens maximum choice on how they interact with government. The bottom line is, if the services NIC develops don’t provide some type of value, citizens and businesses won’t use them.

Matt Williams was previously the news editor of Govtech.com, and is now a contributor to Government Technology and Public CIO magazines. He also previously served as the managing editor of TechWire, a sister publication to Government Technology.2